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Fabuloso

October 17, 2009 4:30 PM

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Hell yea! They are being used for what they were never intended to be used for.

1 replies

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bohemian

October 17, 2009 11:27 PM

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@BB_User: Exactly. All the big brother fears people have should be pointed at this kind of private industry run amuk, not the government.

This is way out of control. Congress needs to deal with it. This kind of thing and all the data collection and reselling both do nothing for the greater good. Credit reports should only be allowed for the extension of credit in a purchase and nothing more.

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thompson

October 17, 2009 4:32 PM

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I know this cuts against the grain among most commenters here, but I actually don't have a problem (generally) with the expanding use of credit reports. How someone deals with money can be a useful proxy for how that person handles responsibility in other areas.

With that said, I also think it's too easy for things to get screwed up on your CR and that there should be more regulation of both the addition of information and the dispute processes.

9 replies

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October 19, 2009 10:58 AM

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If only the credit score really was a reflection of responsibility. I don't borrow money and I have hefty savings and yet my credit score is awful. Because I don't have lines of credit, revolving credit, mortgage loans or anything else.

The score at its best, working in its most ideal way, only measures your willingness to accept credit and your responsibility with using that credit.

Once you take borrowed money out of the equation, the metric no longer holds.

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AngryK9

October 18, 2009 3:30 PM

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@thompson: I bet you believe that because someone was late on his/her car payment three times in the last year it means that he/she would be the worst employee a company could hire.

I might be able to undertand it being considered for someone applying for a job in some sort of financial position, but beyond that, it's simply an invasion of privacy.

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October 18, 2009 6:12 AM

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@thompson: I know what you mean, My credit is so spotless you can eat off it due to an ID theft police report. Something starts to go south, I have the account or inquiries removed. Hundreds of them removed. I have a 700+ credit score, So in the eyes of my insurance company I'm a low risk for claims, except, their model is wrong. I have good credit, because I'm shady. Do I need a snow blower for the upcoming winter? Report a non-existent one stolen and photoshop a receipt. Need new tires? knife my own and get them covered on a $0 comprehensive policy.

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bohemian

October 17, 2009 11:28 PM

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@thompson: Sneaking a hidden camera into someone's bathroom could really tell you a bunch you didn't know about someone too. Doesn't mean we should let that happen either.

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October 17, 2009 10:14 PM

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@thompson: Actually, it's becoming more and more clear that, for instance, a credit report does not tell an employer anything useful about a prospective employee. With the exception of top secret clearance jobs, there is little point in needing a credit report.

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mythago

October 17, 2009 9:11 PM

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@thompson: Lots of things can be a \"useful proxy\" for determining how some people will behave. Does that mean it should be legal for your insurance company to call up every ex-SO of yours to see if they think you were irresponsible?

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October 17, 2009 7:17 PM

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Some of the most responsible people I know have horrible credit scores.

There's an old saying: \"shit happens.\" When \"shit happens\" on your credit report, it can takes many years to dig yourself out of that hole.

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Trai_Dep

October 17, 2009 6:45 PM

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@thompson: Considering that over half the reports contain erroneous information, you might want to reconsider that?

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Tawnie is Monster Mashing

October 17, 2009 5:16 PM

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@thompson: I do not agree with this practice as it is possible for people to be unfairly judged by a credit report. I have had friends in abusive situations that have had their credit trashed. Yes, they got out but it is going to take forever for credit to rebuild and they should not be judged or have to devulge what happened in the mean time.

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Gorphlog

October 17, 2009 4:42 PM

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I think credit reports in general should be illegal. Why should it be legal for a company to compile all that information about you without you having any say about it. If this was Wal-Mart of Best Buy asking for your receipt you would be screaming about how its a privacy violation and yet have no problem with having reports filled with personal information such as SSN, income amounts, payment amounts, types of accounts you have etc... Secondly a bad credit report isnt always an indication of anything other than the person either cant or wont pay bills on time due to lack of funds or financial catastrophe. It has NO bearing on whether they can do a job or not, nor will it show how well the person can drive to gauge insurance rates.

9 replies

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October 17, 2009 7:14 PM

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If credit reports were illegal, then lenders would have to assume everyone was a bad risk, and everyone would pay what people with 400 scores pay now.

As someone who has been responsible with credit, I'm glad credit reports exist.

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bohemian

October 17, 2009 11:31 PM

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@madanthony: Just be glad you don't have BS things stuck on your credit report by some fly by night collection agency. Even the original creditor has told the agency I don't have any outstanding bills with them. I still can't get that item removed from my reports.

Anyone can be screwed by the current system.

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Trai_Dep

October 17, 2009 6:50 PM

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@Gorphlog: Yup. It's pretty damned chuckle-icious that the hyperventilating masses irate about Wal-Mart receipt checks shrug about real privacy invasions, such as these credit report uses or the Patriot (sic) Act.
Let the government spy wholesale on everyone extra-Constitutionally or you not get that job promotion because of erroneous info on your credit report, but gods forbid someone glance at a receipt. Tyranny!

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roanoke

October 17, 2009 5:15 PM

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@Gorphlog: Just FYI, credit reports do not include income amounts. As to insurance, there is actually a statistical correlation between credit score and driving record.

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AngryK9

October 18, 2009 3:34 PM

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@roanoke: Right. My credit isn't perfect. That must mean that I am the worst driver on the roads today, right? Even though I've had one speeding ticket (41 in a 35) in the last 10 years.

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October 17, 2009 10:42 PM

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@roanoke:
Um, just an FYI roanoke, what you have described is a perfect example of the \"post hoc, ergo propter hoc\" fallacy. In other words \"after it, therefore because of it.\" This is not always true. There are lurking variables to consider. Perhaps the area of the city they live in happens to have both a bad local economy (creating credit scores that are average or even good for that area but bad compared to the entire U.S.) and a dangerous driving environment.

The insurance companies would have to do an experimental study (with experimental and control group) to trust data like that.

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Persistence - Long viv revolisyon an konsomatè yo!

October 17, 2009 8:42 PM

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@roanoke: There is, then why doesn't my flawless driving record give me a better credit score?

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October 17, 2009 7:32 PM

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spanky said it, but I want to reinforce: correlation IS NOT causation. The best point I've ever seen, heard, or read on the subject is 'Freakonomics.'

If you haven't, you should definitely read it.

Best (and most offensive to some) example: A study of abortion rates shows that higher rates of abortion are correlated with much lower crime rates.

A deeper study shows that, for the period of time studied, law enforcement spending and techniques also improved dramatically.

So, while it is valid to say 'the data shows that increased police spending results in lower crime rates,' it is also valid to say 'the data shows that increased abortion rates result in lower crime rates.' The reality is, of course, that both had a hand in reducing crime.

Alternate example: \"This rock keeps tigers away.\"

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Stephmo

October 17, 2009 9:44 PM

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@RvLeshrac: You'd be much better off quoting Fooled by Randomness by Nassim Nicholas Taleb when trying to refute the \"correlation\" between credit scores and driving records.

Not only does the entire book discuss the fallacy of market prediction as a whole, but it goes back to the well of the studies that have \"proven\" tie width and skirt length correlations to market trends as well.

Essentially, it's really easy to make the correlation - but you're looking at what? Lagging indicators. Or did they do a good ten year study where they randomly sampled customers and followed credit scores and driving records all over the country and normalized all other factors?

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October 18, 2009 12:34 AM

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I prefer most of the Freakonomics examples, since you're far more likely to shock someone out of a belief than you are to reason them out of it.

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Trai_Dep

October 17, 2009 9:00 PM

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@RvLeshrac: It's pretty clear you haven't read Freakonomics. You should.
Their blog revisits the issue, but the entry's most telling quote is that the naysayers - most of whom were outraged after hearing a distorted version of their observation (Fox News Bible-thumping types, presumably).
You should become a more independent thinker and visit the source material.
If you did, you'd find Dubner & Levitt list FOUR factors, only one of them being access to abortion (Increased reliance on prisons; increased number of police; the bursting of the crack bubble; and the legalization of abortion). Of course, the wingnuts blared to their audience only the Abortion one, to mislead their followers to get all agitated.
Aren't you better than that flock? You should check out the original source. It's not perfect, but it's an interesting and entertaining read.

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October 18, 2009 12:33 AM

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The copy is on the shelf behind me. I didn't want to post an entire chapter. The increased funding for law enforcement (which includes prison build-ups) and legalization of abortion appear to be the major factors, however. While the crack \"bubble\" did burst, I consider that to be less of a factor than the other two/three.

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Trai_Dep

October 18, 2009 4:06 PM

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@RvLeshrac: Oh, okay, sorry about that.
One of my pet peeves about the book is when people that gossip about it mischaracterize his argument.
I think the \"A\" point is debatable, but it's a great illustration of unintended consequences.

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October 18, 2009 12:39 AM

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Oh, and to belabor my point, it was that while a study can show that legalized abortion is correlated with a reduction in crime, it is hardly the only reason for a reduction in crime (causative).

Much in the same way that a high credit score may be correlated with a reduction in traffic accidents, but is hardly the only reason for not having traffic accidents.

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spanky

October 17, 2009 6:28 PM

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@roanoke: It's just a statistical correlation that they use for backdoor redlining.

Unless they can prove that there's causation, they should be prohibited from using it.

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October 17, 2009 4:47 PM

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My wife and I check our credit every four months, from a different CRA each time, to take maximum advantage of the free annual report law. (Reminders pop up in our Outlook calendars).
Each time, we review the list of companies that have pulled our credit report, and figure out the business or legal relationship that allowed them to do so.

So far, almost all the inquiries have been legit, but we did catch a car dealership who pulled a report even though we came in with preapproved credit and they were contracturally forbidden from doing so.

I saved a copy of this list in the (encrypted & well backed-up) folder where we keep the reports. As usual, it pay$ to read Con$umeri$t.

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October 17, 2009 5:15 PM

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Just another way to invade privacy, These reports should be only for credit worthiness and nothing else. Every thing else is an invasion of personal privacy.

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Shoelace

October 17, 2009 5:22 PM

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Credit scores are important but no one should be legally allowed to pull your credit or transfer your credit information to other parties without your (or your legal representative's) written authorization. Create large legal penalties for violators. This should decrease the number of illegitimate pulls/transfers and make it easier to go after those who make them.

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ARP

October 17, 2009 9:40 PM

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@Shoelace: For the most part, its already set up that way. The problem is that you're not given a meaninful choice. Don't want to submit to a credit check for that new job? Good luck getting it. Want to stay a doctor, lawyer, general contractor, etc. but don't want to submit to a credit report? Say goodbye to your licensing. Often the protections are in place, we're just not given a meaningful opportunity to use them.

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lmarconi

October 17, 2009 5:24 PM

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Random question: I've gotten my free credit report before, but what's the cheapest way to get my credit score?
I just graduated from school and I don't really have much on my credit report (no student loans thanks to cheap tuition and scholarships, no mortgage, no car payment, etc, just 2 credit cards I've had for 4-6 years). I'm looking to buy a car and I'm wondering if I should get my credit score before I try?
Is it ever necessary to get your credit score?

7 replies

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October 19, 2009 6:45 PM

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@lmarconi: To actually answer your question, the cheapest way to actually get your real credit scores from all three agencies is to enroll in the credit monitoring service from one of the agencies. Be really careful that you're actually on the webpage of either TransUnion, Equifax, or Experian. I know everyone around here blasts freecreditreport.com, but it's actually from TransUnion and will show you all three scores.

If you sign up for the trial month, you can see all three scores. You just have to cancel the subscription before the month is up or it will start charging you. You have to actually call in to cancel which is by far the most annoying part of the process. Once you've used the free trial, you can enroll for one month at a later date and pay somewhere around $15 to check scores again.

Some people hate the credit monitoring services. I didn't mind paying $15 to know for certain that I was walking into my bank to negotiate a loan from a strong position. Sure, I did my research and found a trustworthy banker that I know she would've told me the score she was looking at, but I wanted to be certain of the report she was about to get when I was making the biggest purchase I've made in my life so far...

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catastrophegirl chooses not to fly

October 17, 2009 6:14 PM

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@lmarconi: i used the credit score estimator from myFICO and it was pretty close to what my bank told me when i applied for a mortgage

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wcnghj

October 17, 2009 6:06 PM

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@lmarconi: Beware when applying for a car loan. Do NOT do it at the dealership, you will end up with tons of inquiries because the dealership will submit you app to many banks.

Check out your local credit union. Ask if they have pre approved draft checks, this way you can find the car you want, fill out the check and be done :).

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Stephmo

October 17, 2009 9:46 PM

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@wcnghj: Multiple inquires in the same 48-hour period for the same type of credit count as a single inquiry.

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jaket

October 17, 2009 5:48 PM

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@lmarconi: Scary how pervasive advertising has conditioned us to crave knowing our \"credit score.\" For someone like you, with an established clean credit history, it's a non-issue. Just get your free credit report, make sure no lies have crept into it, and go about your purchasing with no worries.

If you're getting your car loan from a reputable source (i.e. your credit union, and not repeat not the slimy car dealer), then you'll be fine.

If you are getting your credit from a slimeball car dealer, I wouldn't put it past them to 'invent' the fact that you have a \"bad credit score\" to justify a usurious interest rate. Avoid all that drama and get your loan from a reputable financial institution first. Or -- infinitely better yet for your financial health -- buy a third-party-inspected, reliable used car from a private individual for cash. A new car, and to a lesser extent, a \"retail-priced\" used car sold by the dealer, are some of the worst financial deals out there.

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lmarconi

October 17, 2009 9:36 PM

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@jaket: I'm intending to buy used but I might end up buying from a dealer unless I can find somebody who will inspect an independently owned car and not make me pay through the roof for it. Also it looks like everyone is trying to peddle their not so great cars lately - and I'm not looking for something with 120,000 miles and burn marks on the interior (ah, my first car, I have fond memories of you).

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bohemian

October 17, 2009 11:43 PM

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@lmarconi: Our local repair shop will do a car inspection for $75. Well worth it to not buy a very expensive lemon.

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jbl-az

October 17, 2009 6:02 PM

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@jaket: or you can go to sites like creditkarma which pulls a 'soft' credit report and estimates what your score is likely to be. Its result is probably not 100% accurate, but it also provides useful information.

Of course, if you apply for a loan and get turned down, you are then entitled to a free copy of the report and credit score that was part of the reason for your being turned down, if I am not mistaken.

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lmarconi

October 17, 2009 9:44 PM

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@jbl-az: thanks, I checked out creditkarma and it looks like what I've been looking for - a quick estimate. Not sure how they do it for free, but very cool.

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lmarconi

October 17, 2009 9:34 PM

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@jbl-az: I didn't know that about getting a free copy of the report and credit score when you get turned down. Does this apply to everything like mortgages, car loans, student loans, credit cards, etc?

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jbl-az

October 18, 2009 5:35 AM

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@lmarconi: Yes, I think so. But per the remark by catastrophegirl above, if you apply for a loan with a bank, say, the officer processing the loan may well be willing to tell you what score was reported to them.

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ZukeZuke

October 17, 2009 5:31 PM

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I actually don't have a problem with any of those legitimate uses. Today, it seems like many people are too apt to flake on huge consumer debt, file bankruptcy to get out of it, and then expect there to be no consequences! The rest of us responsible consumers pay for this!

People with good credit should be rewarded. I have scores in the 800s with all 3 bureaus, and when I went to apply for a non-conforming home loan this summer, it was easy as pie, in part due to my good credit. It was a good feeling!

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MrEvil

October 17, 2009 11:57 PM

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@ZukeZuke: Bankruptcy isn't a get out of debt free card. Its just that too many unsecured creditors were too goddamn lazy to show up to the creditors meeting in bankruptcy court (hence the \"reform\" that took place not too long ago.). Any creditor that shows up gets paid back one way or another. My dad and several others with the same mortgage service company (see this link [www.msfraud.org]) filed it as a means to keep the mortgage service company from stealing their homes. My dad paid back every creditor that made a claim in the bankruptcy and paid EXTRA to a trustee who monitored every penny my dad spent for YEARS as well as withheld income tax refunds until the trustee could investigate to make sure my dad wasn't hiding money with the IRS. The bankruptcy itself is the consequence. Not only that legal fees had to be paid to an attorney.

You really need to read up on bankruptcy before you peg it as a \"Get out of debt free\" card. Bankruptcy is anything BUT.

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October 19, 2009 3:33 AM

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You're father went through a chapter 13 or 11 which is far different than a chapter 7. A chapter 7 costs about $1800 and is a total liquidation of all debts- minus a few exempt ones: student loans, back taxes and speeding tickets. So lets say you had a about 115k in unsecured debt and a 30k car loan that was converted to unsecured debt after a repossession, and a 45k lease forfeiture - a chapter 7 would wipe that all out for about 1800 dollars.

Chapter 7 really works out well if you are employed at a salary which is at or slightly above the \"means test\" and it's actually relatively easy to meet the means regardless of income- it's more of a \"hoop jump\" any good attorney can create a plethora of exemptions.

chapter 7 for the win(mostly). you won't be able to finance a car or a home for awhile- but leasing a car shouldn't be a problem and with the economy in the shitter it's unlikely that a BK is going to affect future job prospects.

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bohemian

October 17, 2009 11:45 PM

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@ZukeZuke: This attitude is rather outdated since about 50% of the bankruptcies are due to medical bills the people have no hope of ever being able to pay back.

It is going to become even more so with high unemployment and all those predatory no doc ARM loans coming home to roost. Bankruptcies are becoming more a sign of the times than the outlier that just decided to not pay their bills.

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mythago

October 17, 2009 9:12 PM

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@ZukeZuke: Uh, bankruptcy is a consequence. Do you also feel that because of your high credit score you should get a free pony?

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spanky

October 17, 2009 8:07 PM

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@ZukeZuke: I haven't seen anyone complain about using credit history for credit. This is about other uses of credit reporting, such as when it's used for insurance and employment purposes.

Why should you pay less for you auto insurance or have an advantage in finding employment over someone who has a lower credit score or no credit history at all?

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jaket

October 17, 2009 5:36 PM

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Interesting that a third-party can compile unverified (and historically fraud-prone) personal information for a single ostensible purpose, and the government has legally protected the use of that data for a long list of unrelated purposes. Kind of makes clear where real power lies in this country (hint: not with the people).

Europe is touted as having strong data protection laws. Does anyone know if the whole \"credit report\" industry even exists in Europe? If so, how does it differ from its US counterpart? Seems like there would be some lessons we could learn there.

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wcnghj

October 17, 2009 6:08 PM

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@jaket: Some of the same companies operate over there.

[www.equifax.com]

[experian.co.uk]

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Trai_Dep

October 17, 2009 6:54 PM

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@wcnghj: While they operate there, they must obey Europe's more freedom-loving privacy rules.
It's funny how, even without a Bill of Rights, they manage to be more protective than the US of A.

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October 17, 2009 7:14 PM

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\"omgsocialist\"

I figured someone was going to say it sooner or later!

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jbl-az

October 17, 2009 6:05 PM

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Use in dates has already been foreshadowed in \"Amazon Women on the Moon\" (1987), in the Steve Guttenberg / Rosanna Arquette segment.

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DrLumen

October 17, 2009 6:28 PM

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If everyone would stop allowing the pulling of credit reports then the reports would be useless. We give the credit reporting companies power by acknowledging and allowing their use.

I know, easier said than done but it is a valid point.

1 replies

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ARP

October 18, 2009 12:00 AM

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@DrLumen: See my post above. We're often put in a position where we don't have a meaningful choice. Either submit to credit report or no new job, no renewal of your license, etc. So we become lazy about this type of data and enforcing our rights. Instead we chase the imaginary boogeymen that these industries invent for us that further help their cause. \"Oh noes, the CRA forces banks to lend money to minorities who can't afford homes.\" [False, BTW].

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October 17, 2009 6:41 PM

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just another reason I have multiple identities.

1 replies

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Trai_Dep

October 17, 2009 6:56 PM

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@LostAtoll: I find that adopting kids 7/8ths of the way works too. Keep 'em long enough to get the car washed, the lawn mowed and their social security numbers recorded then BAM! Booted back to the Dickensian orphanage for you, eerily adorable rag-muffin!

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October 17, 2009 6:58 PM

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Study after study has confirmed no correlation between a persons credit and their likelihood of making an insurance claim. There has never been a legitimate correlation.
It's merely a way for insurance companies to jack up prices.

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azntg

October 17, 2009 7:03 PM

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I hate having to say this, but when everyone is effectively treated as criminals, only real criminals have the upper hand.

I'm inclined to view that the way credit reports are used today in the United States (de facto) is almost akin to everyone treating each other as criminals, guilty unless proven innocent.

If credit reports are used to help make judgments for creditworthiness, fine. That was the original purpose of credit reports, wasn't it?

If credit reports are used for embellishment in conjunction with others sources of data, I can generally understand that much too.

However, when a solitary credit report is grounds for imposing all sorts of living hell for an individual (even with other sources of information portraying a different picture), that's the problem. The amount of weight placed on a single, questionable document in this country is criminal.

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Alys Brangwin can't stop the beat

October 18, 2009 4:34 AM

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@azntg: It certainly is making the case to me to move out of this country five years from now.

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Gustastic

October 17, 2009 7:12 PM

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@azntg:
I absolutely agree.

It is positively infuriating and disempowering to give three corporations the power to make or break an individual's entire life. Plenty of things can screw up a credit rating. Sure, plenty of bad credit ratings come from personal choices. On the flip side, things like domestic abuse can leave an individual in financial ruin if their abusive partner manipulates the finances as a way of making them stay.

Credit ratings are bunk. When this number affects the ability of an individual to procure a roof over their head (NYC is a great example of this - loads of people are unable to find legal housing because of mediocre credit ratings), we are edging into human rights problems here.

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October 17, 2009 7:28 PM

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I worry about my credit report being used against me simply because I avoid credit. I have no credit cards - the only thing that should show up on a report is my college and law school loans. I have no idea how this looks to potential employers, banks, etc - I've actually had people tell me that I should have and use a credit card responsibly if I want my credit score to look better when I apply for big-ticket loans (car, house, etc.)

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wcnghj

October 17, 2009 8:55 PM

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@Zeratul010: You should have a credit card. Make some purchases you normally would each month, pay in full, get rewards, etc.

You should at the very least check out your credit reports at annualcreditreport.com

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SadSam

October 18, 2009 10:41 PM

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And this is the problem with credit reports/scores. A responsible person who saves up to make purchases and avoids debt (credit) will have a lower credit score and have a more difficult time obtaining credit for a major purchase (i.e. a mortgage).

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kaltkalt

October 17, 2009 8:07 PM

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Can someone please explain to me the logic/reasoning behind using a credit report to set a driver's premium rates for auto (collision) insurance? Is there some correlation between driving skills and credit scores? They already know what type of car you want to insure, so that's no secret.

Usually my finely tuned sense of cynicism allows me to figure out such things rather quickly. The only thing I can figure is that maybe they argue (and purchased some \"study\" to show) that people with bad credit scores are more likely to file fraudulent insurance claims. I don't buy that assertion for one second, and I don't think it makes any sense when you really think about it. But that's all I can come up with. You're prepaying the insurance premiums (usually in 6-month chunks), so it's not like any credit is involved. So what does creditworthiness have to do with the cost of getting auto insurance?

6 replies

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Bridonik

October 19, 2009 12:52 PM

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First, I don't remember where I heard this so I have no idea how true it might be. However...

I've heard that insurance companies evaluate people with high credit scores as being more financially responsible, and therefore not only being more responsible on the road but also MORE likely to file an insurance claim.

I liked what someone in an earlier post had to say. If I drive responsibly, with no tickets or accidents, shouldn't my credit score go up?

I'd have to say that credit scores should only be used by companies that deal with CREDIT. Car insurance companies should not be allowed to use it. If having car insurance and being a safe driver can in no way improve a persons credit score or worthiness, then it should be illegal to use a persons credit score in setting car insurance prices.

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October 18, 2009 1:09 PM

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If you are irresponsible with your credit then you probably are irresponsible in driving your car.

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spanky

October 18, 2009 2:26 PM

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@woolygator:
@viqas: The moral person argument might hold a little bit more water if it were backed up with some kind of evidence and not just naive Just World speculation, and if it weren't for the fact that people many people have poor or nonexistent credit scores because they never incurred debt in the first place.

Nice try, but no.

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viqas

October 18, 2009 5:06 AM

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@kaltkalt: in the auto insurance aspect, the correlation basically explains that you take more risks as a person if you have poor credit. poor credit doesnt mean you crash your car in to a sprint store everyday, it might add the possibility that you drive aggressively. Another way of explaining this, how many people do you know with poor credit are bright people and make smart decisions?

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spanky

October 17, 2009 9:34 PM

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@kaltkalt: It's just an end-run around prohibitions on redlining. The insurance companies claim there's a correlation between insurance claims and credit scores (actually 'insurance scores,' which are derived from slightly different criteria), but they haven't coughed up studies.

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kaltkalt

October 17, 2009 9:49 PM

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It might make sense with property (home) insurance, maybe people with a lot of debt might be more willing to burn down their home/store for the insurance money than someone with little debt. Maybe. But get into a car accident?

I realize it's just another lame excuse to charge some people more, I just think they should have to meet a high burden of proof in showing a need to use people's credit scores. A tenuous theory based on nonexistent data shouldn't be enough to permit it.

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Cant_stop_the_rock

October 17, 2009 10:56 PM

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Small but important correction - these are not the only permissible reasons an entity can use your credit report, these are the only permissible reasons a CRA can release your credit report.

The law states:
\"Subject to subsection (c), any consumer reporting agency may furnish a
consumer report under the following circumstances and no other:

...

(2) In accordance with the written instructions of the consumer to whom it relates.\"

Essentially that means your credit report can be used for ANY reason as long as you consent to it being retrieved - unless there is some other law that specifically prevents it.

So if someone tells you they need to use your credit report for something that's not on the list it would not be accurate to tell them they're not allowed to use it. You can decline to give them permission, and they can tell you to go away.

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ARP

October 18, 2009 12:07 AM

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@Cant_stop_the_rock: Yes, but often you're in a position of such weakness, its not really an option. Do you want an apartment? Credit Score please. Do you want that job? Credit score. Do you want to keep your license? Credit score. Granted, we overuse credit in this country and some of this is due to the \"I want it now\" attitude where we'll agree to nearly any intrusion so we can buy something shiny RIGHT NOW. But more so, I tihnk its a way to have banks, insurance companies, etc. jack up rates in a quasi-legal way.

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imationlh

October 18, 2009 1:14 AM

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I work for an insurance company in the northwest U.S. For auto insurance policy holders, their credit score can increase their rate by up to 56%. It's appalling.

Credit reports and credit scores should only be used to determine a person's credit worthiness. If you are not borrowing money or working with large sums of money, it should be illegal for anyone to use your credit report and score to make a business decision.

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arstal

October 18, 2009 4:31 AM

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I don't mind credit reports being used for all of those.

Credit scores however- should be just for these
credit and account reviews.

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October 18, 2009 5:53 AM

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It's completely ridiculous for your employer to be able to pull your report for retention or promotion. That's private information, and if I've already been working for these people to the point that they're considering promoting me, they know me well enough already.

Besides, how's that jive with the fact that you may very likely have medical debt on there? That's a violation of privacy laws, since they aren't allowed to have that information without your consent.

What I do off the clock is none of their damned business unless they want to start paying me for that time. Having debt does not mean that you will start stealing from your employer.

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October 18, 2009 2:09 PM

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@NancyCpants: I agree. The only place I can see where it might be relevant is if your job requires you to handle large amounts of money, or accounting, where there might be a risk of embezzlement. But even a poor credit score there doesn't automatically mean that the person will steal.

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Allen Harkleroad

October 18, 2009 9:27 AM

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I suggest that people who aren't shopping for a home, car etc. to freeze their credit (about 10 bucks per reporting agency). Not only does it keep the prying eyes of those who shouldn't have access to your credit report, it also reduces the chance of identity theft and 99.9% of the junk mail credit card offers will stop as well.

And, its cheaper than using a credit monitoring company (ID theft prevention) so instead of paying \"Secure My ID\" or \"LifeLock\" just freeze your credit.

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wcnghj

October 18, 2009 10:23 PM

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@Allen Harkleroad:To opt out of pre-approvals, you'll need to opt out as well. [www.optoutprescreen.com]

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Al Swearengen

October 18, 2009 12:59 PM

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Credit reports are the result of so many factors out of your control, it doesn't accurately show how responsbile you are. For example, my credit card now wants to charge me a monthly fee. I've had the card for 18 years, have never been late, never carried a balance (which makes me a deadbeat in their eyes, but in the real world of responsible consumer activity I am right up there), and never paid a fee. Its the longest held card I have. If I do what I want to do, cancel the card and shop around because I don't want to pay extra fees, my credit score will go down because it will reduce the length and amount of credit. So, the credit card company is reducing my ability to make sound decisions and essentially is going to hold my credit score ransom and charge me a fee that I don't want to pay but have to because I'm in the market to buy a house and don't want my score to go down.

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wcnghj

October 18, 2009 10:24 PM

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@Al Swearengen: Find a new card, apply, get approved , close this card.

The age will remain for 10 years.

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October 18, 2009 1:06 PM

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It's a great way to have everybody (well almost everyone) to start acting in a responsible way.And not act like an idiot.

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repete7

October 18, 2009 2:26 PM

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Checked my credit recently and found that the AZ Dept of Child Support Enforcement has checked my credit. Which is weird because I've never lived in Arizona and all our children have always lived with my husband and me. I've tried to contact them and I can't get through their phone mail without saying I'm a client (which I'm not). Others have suggested that it was probably just a mistake, that they transposed someone else's SSN when they were typing an inquiry (but don't you need more than just a SSN? I could grab tons of people's info by just randomly typing in SSNs).

What recourse do I have? I haven't suffered any damages from this, but I'm really creeped out. What's the point of the Fair Credit Reporting Act if there are no penalties for violating it?

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October 19, 2009 8:23 PM

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Pulling credit report as part of the hiring process feels sorta discriminatory. Sure, some people have poor credit because they flaked on their bills, but plenty others have poor credit because of layoffs, medical bills and other personal crises. A credit score doesn't in any way indicate what kind of employee someone will be.

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October 20, 2009 4:22 PM

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Depending on the kind of dating, the second line might apply.

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